Obama vs McCain - What Will They Do To Your Tax Bill?

Discussion in 'Politics, Religion, Social Issues' started by Cleverboy, Jun 11, 2008.

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Who's tax policy do you prefer?

  1. I Like Obama's Tax Policy

    35 vote(s)
    64.8%
  2. I Like McCain's Tax Policy

    11 vote(s)
    20.4%
  3. I'm still deciding...

    8 vote(s)
    14.8%
  1. Cleverboy macrumors 65816

    Cleverboy

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    #1
    http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/?postversion=2008061113

    CNNMoney does a nice handy table of what affect each candidates policy will have on your tax bill. The question is, does this sound fair to you? Make sure you read the whole article. This article really helps to cut through the rhetoric. What will killing the AMT do? What will allow Warren Buffet to be taxed at the same rate as his secretary? Here ya go.

    ~ CB
     
  2. miloblithe macrumors 68020

    miloblithe

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    #2
    I'm a little disappointed that people making $227k-603k under Obama's plan won't be paying any more taxes. In the end, Obama's plan sounds troubling, McCains sounds terrible:

     
  3. Cleverboy thread starter macrumors 65816

    Cleverboy

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    #3
    You mean "won't be paying any ADDITIONAL taxes". I almost read that as implying that these people would become tax exempt. :) They ARE paying $12 more dollars...

    Personally, I'm not looking to have people taxed willy-nilly, just cause they make more money. I'm also thinking these numbers don't take everything into account, but its a good general watermark. McCain cuts taxes across the board, but considering that people making more money are currently being taxed LESS than middle class and low income citizens... AND Obama gives these groups DEEPER tax cuts, I think that his plan doesn't begin to address fairness... which is kind of dumb.

    ~ CB
     
  4. mactastic macrumors 68040

    mactastic

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    #4
    I think we need to keep in mind that these are only their proposals; and that any tax policy finally enacted will likely be markedly different. These proposals only show the candidates philosophy on taxes, not the likely outcome of their goals.

    For example, if this truly is a change election, and the Democrats control the HoR by 100+ seats, and the Senate with a fillibuster-proof majority, Obama may be emboldened to make deeper cuts to the middle class tax rate at the expense of the super-wealthy. Conversely, if the GOP does well this cycle, McCain may try to provide deeper cuts to the super-wealthy at the expense of the middle class.

    Or either one may be in a more compromising mood, should this election be as close as that last two; which could result in some combination of the two plans.
     
  5. Desertrat macrumors newbie

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    #5
    Obama' big negative is the idea of raising the capital gains tax rate. Half of all households--or a smidgin over--are involved in the stock market. Many from direct ownership; most from retirement plans of their own, or employer retirement plans, both private and public.

    Cut the profits, reduce folks' retirement income, all across the board.

    As well, many university monies are invested in the stock market, with the profits from various transactions supporting their programs.

    It may be attractive as a punitive measure of "Tax the rich!" but that's just flatout a bunch of horse-puckey. The last time the CG rate was raised, income to the federal government declined from lessened stockmarket activity. Lotsa selling ahead of the increase in the rate, more holding-on, afterward.

    'Rat
     
  6. zioxide macrumors 603

    zioxide

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    #6
    The last 8 years prove that McBush's tax policy would be an epic ****ing failure.
     
  7. Badandy macrumors 68040

    Badandy

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    #7
    What are you talking about?!
     
  8. CorvusCamenarum macrumors 65816

    CorvusCamenarum

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    #8
    Call me cynical, but I have a feeling that no matter who wins in November, taxes for most of us will go up.
     
  9. Cleverboy thread starter macrumors 65816

    Cleverboy

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    #9
    LOL. By percentage. Took a moment for me to figure out your gripe. Its rarely, if ever true by dollar amount. Not my intended meaning.

    ~ CB
     
  10. mactastic macrumors 68040

    mactastic

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    #10
    You know what's really horse-puckey? The idea that raising capital gains taxes will affect all these people you claim are "invested in the stock market". By which you mean 401ks, right? If such is your meaning, and there is no other basis for claiming that "half of all households... are involved in the stock market, then you are the one peddling road apples here. Income is placed into a 401k pre-tax and allowed to grow. But when it is withdrawn, it is not taxed at the capital gains tax rate. No, rather it is taxed at the income tax rate, which is significantly higher than the capital gains tax rate.

    IOW, this notion that raising the capital gains tax rate will cut into ordinary American's retirement savings is nothing more than a standard right-wing scare tactic. I'm surprised someone as sharp as you has fallen for this nonsense.
     
  11. atszyman macrumors 68020

    atszyman

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    #11
    Mactastic addressed the fallacy of the first paragraph but what do you think will happen to folks' retirement income when Social Security undergoes a massive benefits cut? I'm willing to bet that more people would lose more retirement income on the latter than what the increase in Capital Gains tax would do to their retirement since that tax would only apply to investments that were made outside of their "retirement" accounts.

    Holding on to stocks is always a bad thing? And if that's the big impact I'd be willing to bet that most of those you refer to as being in the stock market are not constantly trading stocks but are buying a few here and there for companies they like and aren't spending all of their time day trading and will see little effect of the capital gains increase on their tax bills due to low volumes and infrequent sales.

    You think most of us are making over $227,000 a year? (at least according to the article that's the first group that sees their taxes go up, while the rest see a net decrease).
     
  12. CorvusCamenarum macrumors 65816

    CorvusCamenarum

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    #12
    No, I just afford politicians the same level of trust I would lawyers and salespeople. That is to say, none.
     
  13. atszyman macrumors 68020

    atszyman

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    #13
    Of course I don't necessarily mind paying more in taxes if it means I can feel as good about the future of the economy and this country as I did in 2000, before my taxes were cut. I felt much better off then than I do now even though I now pay the government less.
     
  14. Desertrat macrumors newbie

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    #14
    Okay, mac, I stand corrected on the 401k; I never went that route. But company retirement funds are invested in the stock market, commonly via mutual funds. And there are individuals who own stocks or invest in stocks separately from 401ks.

    And it's not just stock. Land, rent houses, etc. All manner of capital items are bought, held and then sold.

    Look: There are a lot of non-rich folks who don't particularly need some chunk of money at any particular time. When the taxes go up, they hold longer than they otherwise would have. "I don't really need the money, right now, so I'll just hold on." That means fewer transactions--which is what reduces federal tax income. And it's even more true for the rich/wealthy.

    And it happened before, so I don't see why it wouldn't happen again. When the capital gains tax was reduced in the 1970s, an incredible amount of sales occurred and the tax income to the feds jumped tremendously. Ford? Early Carter? I don't remember the exact time, but I smiled at the reduction.

    If you tie a higher capital gains tax to the reduction in the estate tax exemption, as has been proposed, it's a double hickey. Look at the inflated value of houses as an example. (An example: I know of a house in Santa Barbara that first sold for $100K. My acquaintance bought it for $300K. A couple of years back, it was on the tax rolls at a million. Even with the current decline, it's still somewhere around $700K. This sort of thing is common with large homes, businesses, farms and ranches--which is why the exemption was raised in the first place.) So some property has to be sold to cover the estate tax, and any profits on that sale are taxed as capital gains. I've gone through this fol-de-rol, myownself.

    And just the concept of a death tax is horrible: You pay taxes on your income, invest some disposable income and accumulate for your kids' benefit and then the feds want to take even more from the already-taxed pile. Raw greed in action. Makes the worst corporation look benevolent. So, people not being stupid, many create tax-free trust funds and the government doesn't get anything at all. Others figure out some way to reduce their personal exposure, and that's not difficult--which can lead to them being actually worth a whole bunch while being eligible for Medicaid. Floridian retirees can give lessons in that. :D The net bottom line for the feds is less income...

    Upper income folks didn't get that way by being stupid. When their billfolds are threatened, they figure out some self-defense methods. Always have, always will.

    'Rat
     
  15. mactastic macrumors 68040

    mactastic

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    #15
    If the concept of taxing income multiple times is so abhorrent, why is there a sales tax that taxes my spending after I've already been taxed on the income?

    Also, there's a fallacy in your inheritance tax logic in that you assume someone is getting double-taxed. Wrong. You get taxed once, and your kids get taxed once. That's not double taxation; it's taxing a transaction. To assert that it is double taxation is as ridiculous as an employee claiming that they shouldn't have to pay taxes on their income because the employer who gave it to them already paid taxes on it, and the people who bought or paid for the employer's goods/services already paid taxes on THAT money.

    If the argument is that money can only be taxed once, we oughta tax it right as it comes out of the mint, and from then on declare it untaxable. Otherwise, you must support the idea that it's not the person being taxed, it's the transaction. Passing your money from you to your children upon your death is a transaction, nothing more, nothing less.

    As I've said many times in this forum, I will happily support an exemption of sufficient size to allow the transfer of farms, houses, and things of that nature to family members or friends upon your death. But the Paris Hilton tax is what we're talking about here. You and I both know that the number of people who are forced to sell property to pay off the badnasty gubmint for their inheiritance tax is tiny. "Be prepared" isn't just some dumb slogan.
     
  16. Badandy macrumors 68040

    Badandy

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    #16
    That actually wasn't the intended meaning. By percentage, wealthier Americans pay more than other groups. The progressive income tax actually does lead to a progressive take for the government in income taxation.
     
  17. solvs macrumors 603

    solvs

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    #17
    Unless you make over 6 figures, and even then in some cases, they won't really that much.

    McCain used to support the "death tax", actually just a few years ago he was quoting Theodore Roosevelt as emphasis for why it was needed. Another flip flop. But unless those estates are around about $2 million, they aren't taxed at that high of a rate. Sometimes, especially with businesses like some farms, they aren't at all. But it makes a good boogeyman about those higher taxes, while our deficits continue to rise.
     
  18. atszyman macrumors 68020

    atszyman

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    #18
    And other taxes like property and sales tend to take up a smaller percentage of the wealthier taxpayers money, which is why we have a progressive tax a the federal level to try to level out the overall tax burden.

    Not all of the wealthy pay more as a percentage either Warren Buffet paid a lower percentage on his income than his secretary did.

     
  19. mactastic macrumors 68040

    mactastic

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    #19
    But of course, talking about income taxation in a vacuum is meaningless. And we've been over this before.
    Yeah, I've tried explaining this to him before. He's deaf to the issue. Like many conservatives, he likes to focus on the unfairness of the income tax while ignoring that when you include all other regressive taxes and fees, the overall tax burden is pretty flat.

    Oh well... you can only explain things so many times before it becomes apparent that willful ignorance is in play.
     
  20. mactastic macrumors 68040

    mactastic

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    #20
    In any case, what I'm hearing from Obama doesn't lead me to believe that MY taxes will be raised.

    For those of you who are afraid of higher taxes under an Obama administration, you must be making a pretty sweet chunk of change, or are living the "trustifarian" lifestyle.
     
  21. atszyman macrumors 68020

    atszyman

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    #21
    To be honest I wish I made enough to complain about Obama's tax increase...

    I do find his payroll tax hole a bit perplexing, why leave the hole at all?
     
  22. mactastic macrumors 68040

    mactastic

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    #22
    Because people making sub-$250k a year are not among the super-wealthy. If you leave that hole, you are only increasing taxes on people who make above that amount. $100k a year ain't what it used to be.

    Around here, you need an income of about $120k per year to afford the cost of the median house. That's solidly middle-class territory, and Obama isn't interested in raising taxes on the middle class.
     
  23. nbs2 macrumors 68030

    nbs2

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    #23
    2009 is still in flux for me. Currently, I am on the border between the Obama and McCain plans. But, I expect that I will be shifting into the McCain camp by next year. However, this table doesn't make clear whether they are providing single or married numbers. I may benefit sharply until Obama.

    BUT. I haven't had a solid income in my working life, and so my retirement savings are not where I would like them to be. Rather than flittering away any increase I see in salary, I would like to invest it towards retirement. With the low amounts that I can contribute to my IRA, I put myself at severe risk of being affected more sharply by Obama's CG hike.
     
  24. atszyman macrumors 68020

    atszyman

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    #24
    But he's not removing the tax on the first $90k. So the Lower incomes will pay a higher percentage in payroll taxes than the middle incomes and upper incomes.

    I'd rather see the reverse of not taxing the first $90k and only those between $180k and up would see an increase...

    Seems like an odd way to go about it with that hole and seems to continue to screw the poor while avoiding an increase on the middle class.
     
  25. mactastic macrumors 68040

    mactastic

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    #25
    IIRC, IRAs are taxed at the income tax level when you withdraw from them, similar to a 401k. AFAIK, IRAs are not taxed as capital gains.

    Well, if you don't tax anyone on the sub $90k the system won't work at all. Everyone should contribute to it anyway. However, I agree with Obama about the donut hole. Keep taxes on the middle class low.
     

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